Ejvind Vgg Own Man in India

The Indian Bollywood Industry

DIBD OMII

Own Man In India

May 2012

Indian Bollywood Industry

Introduction to the Indian Bollywood Industry

Current market situation Revenue distribution Product placement in Bollywood movies Celebrity endorsement, management and brand ambassadors

Indian Bollywood Industry

Current market situation

Bollywood is the most well-known film producer in India, and therefore the name is often used to describe the whole film industry in India even though the industry is divided into many regional areas. The Bollywood production takes place in Mumbai earlier referred to as Bombay, hence the name Bollywood. The name also reflects the American counterpart Hollywood. Bollywood is the largest film producer in the world. They produce roughly 1000 movies a year. Hollywood only produces 500 and Japan produces 400 movies a year.

The Bollywood industry had a revenue of US$ 3bn. in 2011, and has been growing at approx. 10,1% a year. The revenue is expected to reach US$ 4.5 bn. by 2016.

Indian Bollywood Industry

Current market situation

Bollywood films are not only watched by people in India, also neighboring countries like Pakistan, Bangladesh, Nepal, Pakistan, Sri Lanka watch the movies. Moreover, countries with large groups of Hindi and Urdu speaking nationalities like Australia, UK, Africa and the US have many Bollywood fans. And lastly old trading partners like Russia and Japan are also buyers of Bollywood productions. The top five male actors receive between US$ 6 to 16 million a movie vs. female actresses that only receives about US$ 1 to 1.5 million a movie.

Revenue generated from the ticket sales is only a small part of the industry. Celebrity endorsement and management have long been the major profit base for the industry as well as product placement that is becoming far more popular to integrate into the movies.

Indian Bollywood Industry

Revenue growth
4 3,5 3 2,5

Revenue in US$ bn

2 1,5 1 0,5 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Indian Bollywood Industry

Sources of revenue
Film Industry Domestic Theatrical Overseas Theatrical Home Video Revenue measured in percent 74 % 7% 3%

Cable and Satellite Rights Ancillary Revenue Streams

Total Industry Size

11 % 5%
100 %

Indian Bollywood Industry

Key drivers
Growing middle class income - 300 million out of a population of 1,1 billion, High return on investment Low costs of production Many Indians living abroad Increased importance of regional cinema Increased demand for multiplex theaters Indirect profits from product placements, celebrity endorsement etc Favorable demographic changes Higher quality and awareness of the films produced: Slumdog Millionaire; an International production has created a synergy to Bollywood Ra.One released in 2011; Price USD$ 30 million - most expensive Bollywood production Peepli Live; nominated at the Sundance Film festival 2010 and nominated for the 2011 Oscar nomination in the category of Best Foreign Language Film

Indian Bollywood Industry

Bollywood actors & actresses in Hollywood and vice-versa

Bollywood and its A-list actors have the same status in India as royalties, presidents, film and rock stars have in the West
Bollywood and Hollywood are opening up to each other Bollywood to Hollywood Anil Kapoor in Slum Dog Millionaire and later in 24 Aishwarya Rai Bachchan in Pink Panther 2 with Steve Martin and The Last Legion with Colin Firth Hollywood to Bollywood Ben Kingsley in Teen Patti (Three Cards) Sylvester Stallone in Kambakht Ishq Jennifer Chambers directed Hiss

Indian Bollywood Industry

Bollywood company tie-ups/collaborations

Reliance Big Entertainment signed a deal worth US$ 1.2 billion with Steven Spielbergs Dream Works SKG to produce 36 films for the next 6 years Reliance also acquired around 200 theatres in 28 locations in North America to screen Bollywood and other regional movies from India. Walt Disney has invested around US$ 324 million in a deal with Yash Raj Films. Ramesh Sippy Entertainment has collaborated with Warner Bros. Warner Bros has also signed a three movie deal with People Tree Films and a one film tie up with Tandav Films

Indian Bollywood Industry

Product placement in the bollywood movies

Within the last ten years Bollywood has become more international and begun to focus much more on targeting the global audience and environment. Bollywood has realized the necessity to create an ambience and environment in the movies, so the movies are able to target both the Indian culture as well as a more international culture overseas. Many younger Indians in India and elsewhere are very aware of the Western culture, therefore Bollywood tries to catch this attention with product placement of Western products in the movies.

Indian Bollywood Industry

Product placement in the Bollywood movies

Audi Q7 was placed in the major box office Bodyguard (2011). The goal was to create awareness of the newly introduced car brand in the Indian market The prominence of Starbucks in Kabhi Alvida Na Kehna (2006) where the target of the placement was the audience outside India The box office Om Shanti Om (2007) included many different brands like Exide, Tag Heuer, Maybeline and MTV Even real life matrimonial wedding sites gets mentioned. In the movie Namastey London (2007) the website of the Bharatmatrimony.com is mentioned as having the highest reliability in finding your new partner Other brands being product placed: Coca Cola, Pepsi, Pizza Hut, Toyota, Mercedes, ESPN, Sony Vaio, Sony Handycam, Nikon, Kawasaki, Nokia, Sony Erickson, Calvin Klein, Goodyear, Castrol and many more

Indian Bollywood Industry

Endorsement, management and ambassadors

aishwarya rai bachchan LOreal

Priyanka Chopra - Vera Moda

Shah Rukh Khan Tag Heuer

Shah Rukh Khan- Hyundai

Priyanka Chopra - LEVIS

SachinTendulkar Adidas

SachinTendulkar Royal Bank of Scotland

Mahendra Singh Dhoni Reebok

Celebrity endorsement is not restricted to Bollywood, but highly used for anybody who makes India stand out; cricket players and other sport medalists It is not rare that a brand ambassador is also endorsing a wide range of other diverse products Celebrity management is not only commercial functions but does also include celebrities being present at private weddings, birthdays etc. all functions has different rates

Indian Bollywood Industry

Danish contact in India

If you are interested to hear more about India and the rising bollywood industrys possibilities do not hesitate to contact: EjvindVgg director of the DI office in India: E-mail: ejv@di.dk Phone: +91 9930 562729/ +45 2728 0486